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The Satellite News Financial Ticker

By Staff Writer | August 11, 2003

      Week of August 1 – 7, 2003
      Percentage Change

      Symbol
      Aug. 7 Price
      One Week
      One Month
      Three Month
      Year to Date
      Operators
      APT SATELLITE HLDGS ATS
      2.43
      (22.9)
      (11.6)
      89.8
      41.3
      ASIASAT TELECOM SAT
      16.70
      (0.6)
      2.8
      18.4
      46.6
      BRITISH SKY BROADCASTING BSY
      44.35
      (4.3)
      (2.0)
      1.6
      10.7
      ECHOSTAR COMM -CL A DISH
      35.37
      (1.8)
      1.1
      9.9
      58.9
      HUGHES ELEC (GM -CL H) GMH
      13.34
      (3.2)
      1.6
      3.8
      24.7
      LORAL SPACE & COMM LOR
      0.22
      –
      (92.1)
      (94.6)
      (94.9)
      NEWS CORP NWS
      30.33
      0.9
      (0.3)
      4.8
      15.5
      NEW SKIES SATELLITES NSK
      5.65
      (1.1)
      5.8
      10.8
      36.1
      PANAMSAT SPOT
      16.25
      (6.4)
      (10.5)
      (9.3)
      11.0
      PASIFIK SATELIT NUSANTARA PSNRY
      0.16
      –
      10.7
      6.9
      3.3
      PEGASUS COMMUNICATIONS PGTV
      36.12
      (4.7)
      22.4
      11.7
      175.7
      rSTAR CORP RSTRC
      1.09
      105.7
      94.6
      98.2
      354.2
      SES GLOBAL SES.LU
      6.11
      3.4
      11.1
      19.8
      (4.5)
      SIRIUS SATELLITE RADIO SIRI
      1.53
      (13.6)
      (17.0)
      26.6
      139.1
      XM SATELLITE RADIO XMSR
      10.52
      (21.9)
      (18.2)
      (7.6)
      291.1
      Operators’ Average
      100.00
      2.0
      (0.1)
      12.7
      73.9
      Manufacturers
      ANDREW ANDW
      10.00
      (8.8)
      (2.7)
      10.5
      (2.7)
      BALL BLL
      48.86
      (1.2)
      8.3
      (14.5)
      (4.6)
      BOEING BA
      31.93
      (1.8)
      (7.7)
      13.5
      (3.2)
      COM DEV INTL CDV
      0.44
      (18.5)
      (15.4)
      18.9
      (26.7)
      EMS TECHNOLOGIES ELMG
      16.31
      (6.1)
      15.3
      35.9
      4.8
      GARMEN LTD. GRMN
      36.25
      (5.9)
      (10.8)
      (21.4)
      23.7
      GILAT SAT NETWORKS GILTF
      4.54
      (4.2)
      (10.1)
      2.3
      (41.8)
      GLOBECOM GCOM
      3.91
      5.7
      11.7
      34.8
      4.3
      HARRIS HRS
      30.39
      (6.5)
      0.6
      6.0
      15.6
      HONEYWELL HON
      27.65
      (2.5)
      1.8
      13.3
      15.2
      KVH KVHI
      18.93
      (4.2)
      (17.1)
      22.1
      120.1
      LOCKHEED MARTIN LMT
      49.70
      (5.2)
      2.7
      (0.2)
      (13.9)
      LUCENT TECHNOLOGIES LU
      1.76
      0.6
      (12.0)
      (20.0)
      39.7
      MOTOROLA MOT
      9.27
      1.9
      (3.1)
      13.7
      7.2
      NERA NERAY
      2.16
      8.5
      50.3
      77.8
      99.1
      ORBITAL SCIENCES ORB
      8.04
      (2.9)
      8.5
      36.5
      90.5
      QUALCOMM QCOM
      36.41
      (2.5)
      (2.8)
      10.9
      0.1
      RAYTHEON RTN
      30.10
      (1.8)
      (8.4)
      0.5
      (2.1)
      ROCKWELL COLLINS COL
      25.35
      (2.9)
      0.4
      15.2
      9.0
      SCIENTIFIC-ATLANTA SFA
      28.20
      (4.0)
      11.7
      72.0
      137.8
      SKY FRAMES SKYU
      1.07
      (2.7)
      (28.7)
      (14.4)
      (86.6)
      STM WIRELESS STMI
      0.00
      (80.0)
      (93.3)
      100.0
      (99.5)
      TITAN TTN
      15.31
      (2.7)
      49.4
      76.0
      47.2
      TRIMBLE NAVIGATION TRMB
      24.92
      (8.7)
      4.4
      2.9
      99.5
      VIASAT VSAT
      13.06
      (5.8)
      (7.6)
      6.2
      13.2
      Manufacturers’ Average
      100.00
      (6.5)
      (2.2)
      19.9
      17.8
      Nasdaq Composite Index
      S & P 500 COMP
      1,652.18
      (4.0)
      (0.7)
      8.4
      23.7
      SN Stock Price Average SP50
      974.12
      (1.4)
      (1.2)
      4.3
      10.7
      100.00
      (3.3)
      (1.4)
      17.2
      38.9

      Wall Street Analysis

      By Tom Watts, SG Cowen Securities

      XM Satellite Radio [Nasdaq: XMSR] surprised many investors with its second quarter results. Along with excellent subscriber numbers, the company announced it would replace its ailing Boeing [NYSE: BA] satellites with two new satellites scheduled for launch in the fourth quarter of 2004 and in 2005. While the replacement satellites were not a surprise – we knew the Boeing 702s had to be replaced, the timing of the replacement was earlier than the 2006 timeframe we had expected.

      What’s an even greater surprise for many is that XM can afford these satellites. With its second quarter cash balance of $346 million, it can fully fund the $190 million cost of XM-3. Provided it receives an insurance settlement – which we believe is likely despite the insurance carriers challenging the claim (something satellite insurance carriers seem to do frequently) – it can also afford to construct the XM-4 satellite. Overall, XM still looks like it is fully funded until it reaches break-even cash flow.

      XM reported good news on the automotive front. In addition to the 800,000 vehicles that General Motors [NYSE: GM] will equip with XM in the 2004 model year, Honda [NYSE: HMC] will equip an additional 200,000. At the 75 percent take up rate XM has been realizing, this suggests at least 750,000 new subscribers through the original equipment manufacturer (OEM) channel alone.

      XM is also demonstrating success in after-market sales as well. A full 60 percent of the second quarter’s 209,000 net new subscribers came through these retailers. With the addition of Wal-Mart [NYSE: WMT] and the release of new products for the holiday selling season, this channel should accelerate as well.

      We believe the combination of OEM and retail sales could produce 1.5 million new subscribers in the next 12 months. That should put XM on track to more than pay for its accelerated satellite replacements. We believe it will also demonstrate that satellite radio is firmly on track to become a major mass market entertainment service.

      Tom Watts is a managing director and satellite analyst at SG Cowen Securities. He can be reached by phone at 212/278-4260 or by e-mail at [email protected]. Readers should assume that SG Cowen Securities Corp. and/or its affiliates intend to offer services in investment banking to the above referenced companies within the next three months, and to seek compensation for such services.

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